Buyout war unlikely for Kanebo cosmetics

"It is true that we received an offer from Unison Capital for taking over our cosmetic operations. We cannot confirm any details and we cannot say either how we plan to prioritise the two offers,"​ said a spokesperson for Kanebo.

Unison​, the Japenese investment firm, is believed to have suggested setting up a joint company with Kanebo to be owned 51 per cent by Unison and 49 per cent by Kanebo.

Kao and Kanebo had talked about a joint company last December only to announce at the end of January that they had given up initial plans to integrate and instead would be working on a buyout deal.

The deal - if it goes ahead - would lift Kao's cosmetics-related sales to around €2.25 billion, making it Japan's second biggest cosmetics manufacturer after Shiseido.

"When Kanebo and Kao issued a joint statement saying they were working together to come up with a deal, we took that as the firm's reply to our proposal. We can if needed make another proposal although no discussions are currently under way,"​ said a spokeswoman for Unison Capital.

Kao​ - Japan's leading manufacturer of specialty chemicals and household products - denied that it would alter the terms of its bid and admitted to having no previous knowledge of the Unison offer allegedly put forward in January.

"I don't think Kao has to raise its offer price. The two companies have already passed the stage where Kanebo would use Unison's offer to their advantage,"​ said analyst Takao Kanai.

Debt-laden Kanebo​ fell into negative net worth €0.5 billion in September, due to a slump in sales plus hefty restructuring and other charges. Kao, on track to post a sixth successive year of record profit and armed with ample liquidity is in a good position to finalise talks with Kanebo.

Kanebo aim to reach a conclusion by the end of this business year on March 31.